Exam Question and Answer on Market Segmentation

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Salim Brommer is the Marketing Director of Ashkol Furniture Supplies, a medium-sized company which specializes in manufacturing office furniture. The company makes its products in India, so benefiting from relatively low labour costs. However, it has recently experienced intense competition from suppliers who have even lower cost bases. Salim has decided that his company will benefit if he focuses on those customers who can provide higher profit margins.
He has decided to target domestic customers in Europe. Increasingly, private households, particularly those with computers, are converting spare rooms into office-style areas. Additionally there has been a noticeable trend towards working from
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Marketing communication involved in this could be advertising, public relations, direct selling or sales promotion. A furniture showroom would be part of this but a wider approach will be needed. The target market is people working from home and the promotional methods used should be appropriate to this market.
Types of promotion * Direct promotion via mailing lists may be appropriate, although because Salim has no experience in this market, he would probably have to buy the list which may make this an expensive option. * There are numerous home style magazines in which adverts can be placed. * The Internet is a vital part of the life of people working from home and its potential for promotion should be fully utilized, perhaps by setting up a dedicated website.
Organising and designing the marketing communication effort will almost certainly require input from someone familiar with the European market.
Price is the final element of the marketing mix and is an important signal to customers about the product. It is important that the price should be competitive so Salim should investigate the prices being charged by competitors who have similar product ranges. Price should also indicate the quality of the product so Salim will need to decide if he wants to produce a deluxe range or a more basic model. Discounts and payment terms need to be considered as a potential

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